U.S., Mexico keep working through NAFTA issues

 In Politics

With help from Sabrina Rodriguez, Doug Palmer and Adam Behsudi

U.S., MEXICO KEEP WORKING THROUGH NAFTA ISSUES: U.S. Trade Representative Robert Lighthizer and Mexican Economy Secretary Ildefonso Guajardo will meet again today as part of their continued push to close the remaining NAFTA chapters. The last of their two days of meetings builds on more than a week of talks between technical negotiators from the two countries.

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‘Now or never’: U.S. and Mexican negotiators are working to wrap up talks by Aug. 25 in hopes of getting a deal signed by outgoing Mexican President Enrique Peña Nieto. A source close to the talks said the sooner the better because any new deal will be reviewed by President-elect Andrés Manuel López Obrador’s transition team before Peña Nieto signs it.

“It’s a now or never situation. We are close to a deal. There’s a deal to be made but it needs to be made right away,” a source close to the negotiations told Morning Trade.

Lots of buzz around sunset: Negotiators are expected today to discuss the so-called sunset clause, which has been one of the biggest sticking points in the negotiations.

There was talk Thursday that the U.S. could soften or drop its proposal for the deal to be terminated after five years if the three countries do not agree to continue it. But Morning Trade was waved off a tip that the U.S. would abandon its demand for a sunset review. Another tip that Mexico would propose a 10-year sunset review was dubbed “fake news” by a source close to the talks.

Checking off progress: Both countries have “very much aligned on the landing zone for” the environment chapter and have made “very good advancement” on a lot of the remaining items, Guajardo said Thursday after a two-hour meeting with Lighthizer. However, “there are very highly complex issues that haven’t been touched,” he added. Sabrina has more.

IT’S FRIDAY, AUG. 3! Welcome to Morning Trade, where your host is bringing back the NAFTA 2.0 playlist by popular demand and wondering what we need to add to reflect the current mood. This millennial is thinking Evanescence’s “Bring Me To Life” should be on the list, while another early suggestion — which may or may not have come from Canada — includes Pink’s “What About Us?” Let me know what you’re listening to: [email protected] or @mmcassella.

HATCH SEEKING COMMITTEE CONSENSUS ON TARIFF BILL: Senate Finance Chairman Orrin Hatch has tasked his staff to find consensus among Republican members on a legislative response to Trump’s power to impose tariffs for national security reasons, a senior congressional aide told Morning Trade.

“Our goal — we’ll see if we get there — is to see if we can get something that moves through committee,” the aide said, adding that it’s too early to say if hearings will take place in the coming weeks. “The chairman’s instructions is to do so with consensus and that’s what we have to arrive at.”

Sen. Rob Portman (R-Ohio), a Finance member, along with Sens. Joni Ernst (R-Iowa) and Doug Jones (D-Ala.), introduced a bill this week that would put the Defense Department in more of a leadership role to investigate whether imports have an impact on national security. A bill from Sens. Bob Corker (R-Tenn.), Jeff Flake (R-Ariz.) and Pat Toomey (R-Pa.), who also sits on the committee, would make any action taken under Section 232 subject to congressional approval. Another member of the panel, Sen. Michael Bennet (D-Colo.), has also introduced legislation.

Hatch has taken a dim view of Trump’s tariff actions. Upon hearing the news this week that Trump is considering a 25 percent, rather than a 10 percent, tariff on $200 billion worth of Chinese goods, the Utah Republican said the U.S. “cannot keep substituting additional tariffs for a targeted strategy that will actually bring China to the negotiating table.”

EPA EASES AUTO FUEL EFFICIENCY RULES, AS NAFTA TALKS HEAT UP: The EPA announced plans on Thursday to roll back auto fuel efficiency standards set during the Obama administration, which it said would make cars more affordable and safer to drive.

“The current standards have been a factor in the rising cost of new automobiles to an average of $35,000 or more — out of reach for many American families. Indeed, compared to the preferred alternative in the proposal, keeping in place the standards finalized in 2012 would add $2,340 to the cost of owning a new car, and impose more than $500 billion in societal costs on the U.S. economy over the next 50 years,” the EPA said in its announcement.

The attention to reducing the cost of car ownership comes at a time when the Trump administration is pushing for changes in NAFTA’s automotive rules of origin that auto industry groups have warned would make North America a more expensive region to produce cars. The Trump administration also is considering a 25 percent tariff on imported cars to protect national security, despite warnings from automakers and other groups that such a move would raise costs and hurt industry employment.

U.S. and foreign brand automakers issued a joint statement that urged the administration to work with California to find “a common-sense solution” to conflicting state and national standards. “Automakers support continued improvements in fuel economy and flexibilities that incentivize advanced technologies while balancing priorities like affordability, safety, jobs, and the environment. With today’s release of the administration’s proposals, it’s time for substantive negotiations to begin,” the Auto Alliance and Global Automakers said.

The U.S. steel industry, which could see less steel replaced by aluminum under the relaxed standards, cheered the decision, while the Aluminum Association said it was studying the proposed changes.

TARIFF FALLOUT SPANS U.S. INDUSTRIES, AND THE GLOBE: A day after the White House announced that President Donald Trump had instructed USTR to consider ratcheting up tariffs against China from 10 percent to 25 percent, a broad range of industries across the country sought to make their voices heard in opposition.

A coalition of technology groups from 28 groups blasted the tariffs as “ill-conceived” and said they would cause “irreparable harm” not only to tech companies but also to the 11.5 million Americans employed in the sector and far more who rely on tech products in their everyday lives.

The National Marine Manufacturers Association also warned that hiking proposed tariffs would “only escalate, not alleviate, the trade war,” adding: “Opposition to this action and the flurry of previous tariffs is virtually universal among the American business community. It’s hard to believe we are all wrong.”

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